Valuing Medical Schools in Japan: National versus Private Universities

Medical school usually has the highest tuition fees among the university departments. The reason why students pay such expensive fees is that they estimate that their earnings will greatly increase after graduation. We construct a model about student behavior on entering college and estimate the value-added of medical schools using college data from Japan. Our results show that a school with a long tradition of providing high quality education is evaluated as rendering high value-added to students. Those empirical results enable us to simulate the effects of the privatization of a public university. This simulation indicates that there is no difference between public and private schools when the tuition fees of the public university become as high as those of the private university.